Mr LAUNDY (Reid—Minister for Small and Family Business, the Workplace and Deregulation) (16:14): Firstly, I'd like to thank those members who have contributed to this debate. The Corporations Amendment (Asia Region Funds Passport) Bill 2018 implements, as we've heard, the regulatory framework for the Asia Region Funds Passport. This passport is similar to a free trade agreement for managed funds in the Asia region. It will harmonise certain regulatory requirements and create a passporting regime that will remove duplicated regulatory barriers for qualifying funds.

As we've heard, Australia has the sixth-largest pool of funds globally and the largest in Asia, with over A$3 trillion in funds under management. The 2009 Johnson report found that Australia has comparative advantages in funds management—a highly skilled and developed workforce, a reputation as a safe investment location, solid financial institutions and strong links with Asia. However, it noted that these advantages have not translated into strong export of funds management services. The regulatory red tape and difficulty in accessing overseas markets has meant that the level of funds Australia manages on behalf of foreign residents is very low when compared to other financial centres in the Asia region. In 2016, only four per cent of total funds managed in Australia were sourced from overseas. This compares to approximately 69 and 80 per cent in Hong Kong and Singapore respectively.

The potential benefits for industry and consumers as well as the wider economic impact of introducing the passport are significant. Through this bill, Australian fund managers will be able to offer their products in other participating economies. The current participating economies are Japan, Korea, New Zealand and Thailand. This offers our fund managers the opportunity to tap into Asia's expanding middle class and increasing numbers of high-net-worth and ultra-high-net-worth individuals. The passport will benefit investors through greater choice of funds. Increased market competition will also lead to better consumer outcomes by ensuring access to more reasonably priced investment products. The passport will be supported by cooperation between the passport regulators, ensuring strong enforcement across the passport region.

The passport also delivers on the government's commitment to build a stronger economy as it transitions to a more service based economy. The wealth management sector has been identified as an area that could assist in this transition. Unlocking this potential is highly dependent on changes in regulatory settings. The passport has been extensively consulted upon and has strong support from the industry, which recognises the potential that the passport could ultimately bring. I commend the bill to the House.